CBN Insists Naira Not Devalued, Only Readjusted
Central Bank of Nigeria (CBN), has said that the Naira was not devalued, emphasising that the exchange rate was only readjusted to reflect the current global realities.
This came after the apex bank changed the exchange rate of the Naira to the Dollar at its official window from N307/$1 to N360/$1, fueling speculations of the devaluation of the local currency.
The interbank exchange rate is the rate the apex bank sells foreign exchange to the federal government and its agencies as well as some companies. The rate is different from market rates.
Mr Godwin Emefiele, governor, CBN, however, said at the weekend that the central bank merely carried out an adjustment of price and not a devaluation of the currency as it’s being reported in the media.
Mr Emefiele made this clarification on Saturday when the apex bank had a crucial meeting with chief executives of banks operating in the country to discuss the effect of the global coronavirus pandemic on the nation’s economy.
Announcing the outcome of the meeting, the central bank said, “CBN Governor, Godwin Emefiele, clarifies supposed devaluation of Naira. Says it is an adjustment of price and not a devaluation of the currency.”
Also, on Friday, the central bank devalued the exchange rate of the local currency to the American currency to N380/$1 from the previous rate, N360/$1.
However, before this action, the rate had depreciated to N375/$1 as a result of initial speculations that the Naira was going to be devalued, of which the CBN said it was not going to do.
The crash in the price of crude oil to nearly $20 per barrel at the international market raised such fears because Nigeria depends mainly on oil for its external earnings.